Saffron Building Society launches inflation-busting 9% regular savings rate – but here’s why lower interest rate deals may be a better bet…
- The savings account is exclusively available to Saffron members
- It can be opened with as little as £1, but with monthly payments of up to £50
Saffron Building Society has launched what appears to be a leading savings account with an inflation rate of 9 percent.
Just after Skipton launched a 7.5 percent deal, the Members’ Month Loyalty Saver is an exclusive savings account designed to reward its loyal customers who have been with the mutual since June 1, 2022.
Eligible customers can open the account online or in a branch and keep a minimum of £1 in their account to receive the interest.
The 9 percent rate is fixed for 12 months and all interest is paid at the end of the term. There’s a huge catch though – only £50 a month can be saved in it.
News: Saffron Building Society has launched a market-leading limited edition savings account with an above-inflation interest rate of 9%
Unlike some regular savings accounts, customers can withdraw money once a month. This means that they can also close their account at any time.
Colin Field, chief executive officer at Saffron Building Society said: ‘We introduced this flagship product to mark the launch of our first Members’ Month.
‘The Member Month Loyalty Saver has been developed to give our small savers a great deal of support.
‘Members are the heart and soul of the association and we are delighted to have this opportunity to reward, surprise and delight them.’
However, this headline-grabbing deal has a big catch: the maximum limit is low by the standards of most regular savings accounts.
Savers can deposit a maximum of € 50 per month. A total of £600 over the 12 month fixed term.
This means that the total fare may not turn out to be as lucrative as some may assume.
Even if a saver puts in £50 each month, which equates to £600 over the course of a year, this means that despite the astonishingly high interest rates, they will have only earned £29.25 at the end of the 12 months.
If someone was able to put £600 into the best easily accessible deal and pay 3.85 per cent, at the start of the year, they would earn £23.10 in interest.
Do you need to sign up?
For starters, this savings deal will only be available to a few people. Saffron Building Society currently serves around 100,000 members in the UK with a range of competitive mortgage and savings products.
For those who qualify, it will be great for anyone who drops and gets into the savings habit.
Essentially, this is a great option for anyone looking to save up to £50 a month.
| Provider | Rate | Maximum monthly deposit | Maximum balance | Maximum return after 1 year | Can you withdraw at any time? |
|---|---|---|---|---|---|
| Saffron BS | 9% | £50 | £600 | £29.25 | Yes |
| Skipton BS | 7.5% | £250 | £3,000 | £121 | No |
| First directly | 7% | £300 | £3,600 | £135 | No |
| Lloyd’s Bank | 6.25% | £400 | £4,800 | £161 | No |
| NatWest | 6.17% | £150 | £5,000 | £60 | Yes |
However, many will probably feel rather limited by the £50 maximum monthly limit.
While the 9 percent rate is the market-leading deal, there are other regular savings accounts that are much more generous when it comes to how much depositors can pay each month.
Skipton Building Society pays 7.5 per cent and allows depositors to put in up to £250 each month for a year.
Both the Lloyds Bank regular savings account and the First Direct also offer customers the opportunity to accrue much more interest as they allow for higher monthly deposits despite the lower nominal rate on offer.
For those who have even larger piggy banks, it may make sense to consider an easily accessible savings account or fixed-rate account.
Check out the best easy access savings accounts and fixed rate offers here.
James Blower, founder of the website, The Savings Guru, says: ‘It’s a nice headline rate, but the fact that it’s capped at £50 a month means savers who put in the maximum will only get £29.25 in interest, which may not be the case for many. worth setting it up.
“If you’re a Saffron member, on a low income, that’s a nice way to get a nice emergency fund going and worth it, but otherwise it’s probably little more than a nice thank you to existing members.”